Alexa Binns 00:00
Welcome to swimming with alligators the VC podcast from the LP perspective, with your host, Alexa bins and earnest. Are you ready? Let’s dive in

Earnest Sweat 00:14
On today’s episode. Our special guest is Christina Drake. We are in luck today, because she has a breadth of LP experience. She has stints at Bridgewater, working with sovereign wealth funds. She’s been an investment advisor to major non profit institutions, and her current role at Renaissance venture capital, fund to funds is just an awesome organization, and they do some great programming too. So we’re going to learn a lot today. So with that, I want to welcome Christina to swim with allocators.

Christina Drake 00:49
Thank you. Great to be here.

You have a very interesting background that not many allocators that we come across have. So I would love to just hear your story of how you got into this world. Sure,

Christina Drake 02:26
it was a complete accident, and honestly, something that I probably avoided, I guess so. I studied marketing and organizational communication in college, and I hated my finance classes. And you know that I don’t have a traditional background, because I say finance, not finance. So I hated my finance classes. I hated my accounting classes. I took, you know, the ones that were required and nothing else. Hated the econ classes, all of it. And I figured, you know, I’ll go do marketing. And I had a marketing job lined up after I graduated, but I was lucky enough to graduate in 2008 and so the marketing job that I had lined up lasted about two months. And then the company that I started, read CE to exist, like so many others in the great financial crisis. And so I totally, I was, you know, I was, I was, like, pretty blindsided by it, honestly, you know, I felt like I had done all the right things, and, you know, I had done internships and all of that. And it took a while for me to, you know, figure out what my path was going to be, and I did this terrible door to door sales job for about six months because no one was hiring. It was a pretty tough time, but it taught me a lot about how to approach people. I certainly wasn’t afraid to talk to strangers after that, and eventually, I got connected with a recruiter who introduced me to Bridgewater. At the time, I did not know what a hedge fund was, to be totally honest, I’m not sure. I still not sure I know what, but, but it was an entry level job, and I, you know, I needed, I needed the paycheck. I needed a reliable paycheck. I, you know, figured I’d stay there for two or three years, get something solid on my resume and then go do a marketing job. But I got really lucky that I had some fantastic mentors and advocates, and I was able to build a career path there, and ended up staying for seven years.

Alexa Binns 07:47
I also feel like the word of the year for VCs has been storytelling, marketing. That’s

Christina Drake 07:56
what happens in a down market. Emily, all of a sudden, trust, be a good storyteller

Alexa Binns 08:03
and here you are. You already have that skill of any advice on actually, like how VCs can think, like better marketers.

Christina Drake 08:12
I think one of the biggest things, I guess, that I have learned is don’t be afraid to tell. You know, for a long time, especially early in my career, which I think part of this is valid, right? It’s like, what do I know? I’m, you know, 2324 I haven’t been doing this for very long. Why do you know what I have to say is worth listening to? But over time, you know you have to figure out how to tell yourself, how to tell yourself a different story, right, and understand that some of the things, some of your experiences, are worth talking about and might be helpful to others. So that’s the first piece. And then the second is probably to know your audience and do a bunch of research on your audience and share the genuine and authentic parts of your story that will resonate with them. And then I think the last point for me is to speak plainly. I get, I get so annoyed with all of the jargon and acronyms and name dropping, you know, all of those sorts of things. It’s like, if you really believe in what you’re doing, or really believe in your strategy, or, you know, whatever it is that you are talking about, you should be able to speak, you know, pretty plainly about it and explain it to someone who’s not in it every single day.

Earnest Sweat 09:40
Yeah. So it reminds me of my public school teacher mom always saying, if someone can explain something to a five year old, they don’t really understand it. Speaking plainly, it is shared. It shows how much you know about a specific concept or something that’s complex because you. Able to break it down. So, you know, going back to Bridgewater, because it’s kind of like, you know, hedge fund is, it’s, you know, it’s a different world than going into the private markets. What are some things that you glean from that experience, specifically, kind of taking the thread of Client Services. What did you learn there?

Christina Drake 10:19
I think one of the biggest things that I learned is the value of market research and insights that might help a client make decisions in other parts of their portfolio. So not just focusing on the narrow sleeve or bucket or, you know, whatever it is where, like where my firm’s products happen to be living. So for example, there was a point maybe not too dissimilar from today, when the US Dollar was just ripping and Bridgewater started sharing some of their insights on what was happening, which then prompted a lot of our clients to start to think about what that means for their international exposure, particularly in emerging markets, right where there are, there can be much bigger swings in the currency exchange. And so they could be getting positive alpha from the core exposure, from the actual strategy, but then the currency drag basically wiped out any positive performance. And so we started doing some custom analysis to help clients estimate how much of their exposure might be worth hedging. And so, like balancing the trade off between the potential hedge value and then the cost of actually implementing the hedging instruments and so on. It didn’t have anything to like directly to do with their investment with us, like all of their investments with us were US dollar based, but it had everything to do with, you know what I was talking about before, which is like building trust and building a meaningful relationship, and, you know, helping to contribute to something that made their lives easier, even though it did not have, you know, a direct real Time benefit to us

Earnest Sweat 12:00
So taking that and applying it to venture, does that mean during an AGM, we have more market maps, or should the up into the right just be should the line be bolder for you? It’s like, how should you know VCs apply this perspective?

Christina Drake 12:20
I think market comments are always really helpful. The other thing that is really helpful that provides perspective, and in my opinion, also helps to continue to build a relationship and to build trust, is not being willing to talk about the mistakes that you made. Right, being willing to talk about a miss, being willing to talk about a write off, and like, if you do it well, you’ll talk about the main lesson or two that you learned from that experience, and what you corrected right within your team or your process, or whatever it is to try, you know, to make sure that that doesn’t happen again, that I think, is one of the most meaningful things.

Alexa Binns 13:09
I was just sort of trading notes with a friend who’s planning an AGM, and we were sort of saying, okay, which are the things in here that have real value? And our other friend chimed in, and she said, most of the market mapping stuff, you know, you start to hear the same thing that part, you can sort of fast forward, but, but we decided on a phrase, insider insights, as opposed to thought leadership or something, where you’re a little bit closer to boots on the ground what’s actually happening in these businesses, and so like pulling that out so that you can start to have those, like, real life examples of what’s happening. I heard from a friend. He was like, Yeah, you know, I don’t know what’s going to happen with Nvidia stock, but they’ve made so many senior employees so wealthy that we’re all planning on leaving. And that’s an insider insight, right? You know, that’s, that’s, that’s a fascinating data point that I think, like more AGMs could focus on some of those sort of like, I wouldn’t call them caveats. They’re like, real, tangible data points, but not the, like, global market map kind of stuff that

Christina Drake 14:29
everybody’s presenting. Absolutely.

Alexa Binns 14:33
One of the things you discussed was the US dollar. Are there other adolescents, Lauren, you can share with us from your days working with these big international clients. Say, you know, I think you probably were dealing with folks around the globe.

Christina Drake 14:52
A lot of like, really interesting experiences, and I learned so much from working with international allocators in particular, especially when it came to sort of comparing and contrasting financial regulations in Europe versus the US, and kind of the like consequences, I guess, of each and how that starts to affect decision making on investment teams. It was, it was just fascinating to watch that play out in real time. You know, Europe has always been a fair bit ahead of the US when it comes to ESG investing, and so I think I was at a real advantage of getting exposure to that several years before it really started to take off here in the US.

Earnest Sweat 16:12
And so you got great experience in New York, and then you went off to Bridgewater, and then you moved to a consultant named FEG investment advisors. And so could you tell us a little bit about that organization and who they served?

Christina Drake 16:30
Sure, yep, FEG is began as a traditional consulting firm working with non profit institutions, and then eventually it also started offering outsource Chief Investment Officer services or OCIO relationships, where, I mean, I’m sure most of most of your audience probably already know this, but in the spirit, right of explaining things to someone who’s not in it every day, consulting is basically, I’m going to give you recommendations on portfolio implementation across all asset classes, and it’s for you to take relief. OCIO, the outsource version is you have given me that fiduciary responsibility, and so you provide me with a map. You tell me what your strategic allocation needs to look like, and any constraints and and then I’m responsible for actually, you know, building the portfolio and making those manager higher fire decisions. So FDG, as a firm offers both my clients were about 5050 and they were all non profit institutions, and so think university endowments and foundation, community foundations, private foundation, health care systems, Native American tribes, and then cultural organizations like museums and synagogues and churches and that sort of thing.

Earnest Sweat 17:54
What was the level of kind of internal sophistication when it came to the various asset classes, and how much of your role was around not only exposure, but education.

Christina Drake 18:06
A huge part of my role was education, and then I was lucky to work with a great research team that was organized by asset class to really lean on them to do a lot of the detailed due diligence work, and then it was like, it was sort of like having someone it was like having someone come to you, come with you to the Cheesecake Factory. You know, they have like, a 1000 page menu or something like that, it’s too much. It’s like having someone come with you and sitting next to you and say, here are the 20 best things, and then, like, I could choose from there. Like, alright, out of these 20 best things, here are the five you know that I’m going to put in front of my clients. I’m sure that my my former team names at FPT are not going to appreciate that

Earnest Sweat 18:59
I was going to say, I was gonna say, or all the emerging managers being like, okay, so am I in the soft drink section, or

Christina Drake 19:09
Am I a mini pasta? They’re front and they’re front and center, and I know we’ll get to that. We’ll get to that, but they’re,

Alexa Binns 19:17
I give you credit, you put together really pretty photos of the cheesecake. It’s been laminated. This thing is, this is a Bible. So there’s a lot of effort that goes into creating the Cheesecake Factory. I’d love to sort of just dig in on a specific client, maybe a foundation or an endowment that you could just share some color on, I don’t know, digging in a little bit on one example,

Christina Drake 19:50
sure. I think, first, you know, just across the board, all of my clients, and I think institutional investors in general, needed it. Had reliable, consistent returns, of course, so obviously, like the main thing that we were trying to do is work for that and to choose the very best managers based on their long term strategy and any concerns that they had. But most of the time, just as important, clients were looking for really high quality and reliable data, and then they’re looking for analysis. They’re looking for information that will help them make good decisions. And so, you know, this is like I mentioned before. This is a lesson that I started to learn at Bridgewater, and then really became front and center for me when I moved into an advisory role. And so I spent a lot of time figuring out how and how to, like, educate and inform clients and committee members on market trends, performance, attribution, analysis of past decisions, right and and models for planning out, for example, how much capital to commit to private markets each year. So these are not super exciting things, but they’re pretty crucial to improving your decision making. And the way that I think about it, investing is mostly about trying to predict the future, and so the more reliable and consistent information and data you can have, the better your odds of being successful. So I think one of the most probably impactful things that I provided to clients is what I just referred to, which is literally like a planning, a plan for how much capital to commit to private markets overall each year, and then, like, if you drill down by asset class, so venture buy out, private credit, private real estate, like, you know, drilling down based on what their ultimate strategic allocation target is and the size of the the pool of money taking into consideration any distributions right most, most private foundations are required to distribute 5% of their capital each year, and then adding in a ton of assumptions about performance and about the path of their existing assets, and then being able to show them and show their committee a really pretty bar chart, like you take all of that together, here’s what we estimate, and it’s, it’s, it’s a guideline, right? Nothing is perfect, but it really helps with planning, and, you know, figuring out what the next 18 month might look like

Earnest Sweat 22:42
Since you mentioned it, I have to pull this thread. You mentioned like your goal was first and foremost for these foundations and endowments were to provide a plan for consistent returns in a world where and I know it was diversified amongst asset classes, but how has that impacted your view on venture today, when I can’t, I can’t even remember, how many unicorns we have in the market today, in the US alone, we have, you know, depending on different banks you talk to, We have 50, 100 200 companies expecting to go public in the next two years, whenever that is opened up, and it seems like M and A has kind of really closed down. So what are you all thinking about as a friend told me, you know, how can you put the narrative of dpi within your story of you know, whatever you are selling to LPs. What do you all think about that?

Christina Drake 23:46
I was at an AGM a few weeks ago, and the swag that they were giving away was a yeti that just said in huge flock letters. DPI is the new IRR, which might be like the nerdiest swag ever, but, but it’s true. Yes, it’s front and center. It’s something that we have been talking about with our clients for the last three years, and so like, we actually created our own chart right to show our investors how much we’ve distributed over time versus the market median, and it’s something that we look for at every single annual meeting that we go to. So top of mind for me right now, because I’ve been to four of them, I think, in the last four weeks. But we’re looking for details on Exit Planning, and that, of course, was a consideration right when we would meet with managers, either, you know, managers that are already in our portfolio, or new ones that were diligencing and considering putting in our portfolio. But it has become like this. The main area of focus now. So yes, I want to hear about what you’re doing to help your portfolio companies grow and scale and hit ARR milestones. But I also want to know how, how are you staffed, and how are you structured, and what processes do you have in place, and what relationships are you building to help work toward exits? And some of the funds that I’ve seen do this really well. They actually have a plan for every single portfolio company, and they’ve mapped out like, here are the types of relationships that we need, whether it’s private equity or whether it’s a corporate strategy or whether it’s an investment banker, you have to eventually work for an IPO. They’ve mapped it out, and that is the like. That is what I would love to see from every manager I know, particularly at an early stage. At earlier stages, feed an A that might seem like a ridiculous request. Have someone well, I’m fully aware of that, but you have to show right that you are that it’s on your radar, yeah, um, at the very least.

Earnest Sweat 27:25
We’re going to take a quick break to speak with our sponsor on the show today. We

Alexa Binns 27:30
have a friend and industry expert, Nick Talwar factional CTO for both VCs and their port coast. His agency, Bottega Eight trains, custom AI models for financial institutions like yours. Welcome nick your firm, bottega Eight offers custom AI model training for financial institutions like PE, VC funds, investment banks and fintechs. Why do you need a custom AI model training versus something off the shelf. It’s

Nick Talwar 28:00
a great question. Yeah, there’s two big advantages to custom AI model training that we bring to the for one is like, we’re seasoned experts. Pretty much everyone on our team has like, 10 plus years of machine learning, data science AI. And second, we have exclusive access to NVIDIA GPUs right here in the US. So the same once big tech is hoarding, we got them through a series of partnerships, which is great, and that gives you a big edge without the overhead and big tech has once you use their APIs in the cloud. And there’s a lot of challenges there. First of all, LMS is very generalized. They’re powerful but tricky. They’re like, extremely horizontal, and they need a lot of engineering gymnastics to fix issues like hallucinations, injecting the right enterprise data like you have to hire an AI ops AI engineer, back end data scientists, and they’re all highly sought after right now. And you gotta, you know, there’s, we’ve already iterated through multiple technical architecture formats to use these big tech APIs, when the real solution, a lot of times, is just train your own model. But it’s, you know, kind of esoteric and elusive. And none of the big tech marketing is going to tell you that obviously. So the custom model benefits. You can skip those constant updates and shifting and all that complexity to hire an entire engineering team, and then you just have a core model that has the context of all your proprietary data, building a model around it, and a lot of times actually improving your IP story. Because we all know how fractured data can be in all these different silos in an enterprise. But if you train an LLM along it, or fine tune and off the shelf, we do both, you’ll basically get like a smart version that’s assessed all that information and made sense of it, and you can just chat with it. And deploy it yourself, and you know, then it’s just like, very easy. It’s just as simple as an open AI API integration, which you can do in like 30 minutes. But instead, it’s an entire model that has the context of your entire organization, private, secure and prepared and preserves your proprietary boat, and you just have lower costs and more control this way. And then the final outcome is a competitive edge and more control over your IP, and it’s practical and efficient. And you know, which we just focused over the last year and a half around, what is that true barrier to getting towards this amazing secret sauce that we can do as engineers, and that’s literally this, and so we’re bringing it to the marketplace.

Alexa Binns 30:46
And what does this end up looking like for financial institutions? I’m curious sort of, what the end product, how that goes into play for them and their businesses in

Nick Talwar 30:58
a lot of different ways, like if they’re cyber security and privacy, like your family office, and that’s really, really important to you. You might have generational, you know, data, it’s then, you know, we’ll air gap it, and we’ll even deploy it on prem, and so you’d have that in your own infrastructure, like this. It’s also great for for hedge funds et cetera, that we’ve been speaking with that, you know, that’s their competitive edge. And so do it that way. Another way is like, we’ll deploy it and do some simple servicing. It’s really easy, and then maybe once a quarter, help you retrain it, if you want. And to most of these customers, it’ll just look like you’re talking in chat GPT in a lot of ways. And they can also use it along with chat GPT. So that’s even more interesting. It’s very easy as to, like, you basically have your core proprietary model, and then that has all your data, and then you use chat GPT, or these generalized models for sort of general questions. You know, how we’re all familiar with using it, but in more of an enterprise context. And then you can basically have that at your disposal, and don’t have to Rifle through all this data or pass emails and stuff like that.

Alexa Binns 32:11
Sounds like, sound sounds like privacy is sort of going to be a key element here. What are sort of, some of these security risks that are inherent with big tech AI, API is, versus building something custom, yeah,

Nick Talwar 32:27
These risks can lead to significant reputational and financial loss. So I’m glad you brought that up. So with big tech, AI, there’s data aggregation and profiling risks. They update, you know, data across multiple like dots, 10s of 1000s of customers, and that means sensitive data points. And then they can use fuzzy matching and these to actually, like, stitch those together and and over time, you know, in two, what we call that like, sort of leakage by unintentional egress and fuzzy matching like that can be done to stitch things together. Like ad networks have this problem all the time. Secondly, an atomizing data is very, very hard, and even if you do so and do the integration and big tech claims that, oh, we’re gonna, we’re gonna give you your own private sandbox systems trained on the entire internet, are getting so smart they can re identify. And as much as we think that we are like the most, the most like unique flower in the entire garden, there is, there is content on the internet that can reconcile and bridge that gap. And then there’s limited control over data use Once data is ingested to a big tech system, it’s really hard to monitor who can access it. There have been data breaches, like open aI had multiple of them. And this is, this is really important, like, you know, for financial firms, this is because their institutional brand is decades old. And so whether, whether you’re a hedge fund, PVC family office, and you really can’t, you know, muck around with this stuff, especially when it’s shifting so fast and so, and at the end of the day, big tech can be just a black box, and it’s better to just, you know, do what you can on your own and control that.

Alexa Binns 34:20
You hinted at this a little bit with your Nvidia partnership, but building custom AI models sounds expensive. How do you make it more affordable?

Nick Talwar 34:31
Yeah, we have an in house expertise, so you don’t hire an engineering firm, our engineering team, and we have, like, a streamline, end to end process, and frankly, a lot of a lot of times, like, if you you don’t even have an engineering team, much less an IT team. So where do you even start? Like, a lot of times other clients were like, they’re just like, we don’t even know where to begin. And so that is expensive. Spinning is expensive for a quarter trying to figure out, like, like, what to do if you were to embark on this on your own. And. And we have direct hardware access that very few other folks have. We had minimal ongoing costs. We can just basically help you once it’s trained and deployed. We can help you, and then we offer a lot of on prem access for security reasons. We can, we can do it how you wish, and ensure that, like, things are air gapped, and you have that peace of mind. And so that’s like, that’s how we operate. And we, we think that it’s like, probably 80 to 85% more cost effective, yeah, to do it this way

Alexa Binns 35:36
Now, having that specific focus on financial institutions, I feel like you’ve, you’ve ironed out the process so that it’s something that you can implement for other new clients. Well, thanks.

Nick Talwar 35:52
Yeah, we do our best. And, you know, obviously it’s an evolving space, and we’re learning and changing every time. And you know the concept of an AI expert today. It’s like, you know, almost like an oxymoron, like, you know, you’re you’re learning every single day, something else happens, is coming through. But we know, in the last year or two, doing this, lots of projects, that this service kind of solidified a deep need for financial institutions. So

Alexa Binns 36:17
I’m very humble. You’re far more of an expert than most of us.

Nick Talwar 36:23
Yeah, maybe, maybe a little bit more than some, but not all.

Alexa Binns 36:27
Thank you so much. Nick. If you are looking for help implementing AI at your fund or across your portfolio, you can please go to bottaga eight.com, backslash swimming, that’s B, o, t, t, e, te, a, eight, as in the number.com backslash swimming. We appreciate you giving this the credit, so please use the URL and now back to our LP interview. Can you give us just a quick 411, on what is Renaissance? Where you are now,

Christina Drake 36:57
sure. Renaissance Center Capital is a venture fund based here in Michigan. We are a pure fund of funds. We don’t do direct deals. We aim to invest in the best lower middle market venture funds across the country, and then we use that network to bring funds to Michigan and to introduce those VCs to Michigan founders, with the goal of eventually getting more deals done in the States. And then the third thing that we do is we connect Michigan based corporations with our underlying portfolios, so startups that have been backed by the funds that we’ve committed to, and you know, who are doing things that are interesting to those Corporation and

Alexa Binns 37:57
So are your LPs, primarily those corporations

Christina Drake 38:01
Are our LPs those corporations? Yes, and then they’re also endowing Foundation, pension fund, family offices, a handful of high net worth. But Renaissance was founded in 2008 and we had, like our entire LP base were those corporations so they sort of banded together behind the premise of renathons, which I feel like I always feel like I have to give this disclosure. We are not an economic development fund. We are not an Impact Fund. The way that I describe it is, we are a venture fund, a fund with a really smart, thoughtful, kind founder who just decided from the very start that he wanted to use his network and use the network of being a fund, a fund to help solve some of the innovation gaps in his own community.

Alexa Binns 38:58
For the GPS listening. Why should they be coming to Michigan? Tell us about what’s in Michigan.

Earnest Sweat 39:04
Well, I can, I can actually answer that for you. I was gonna say that I’ve been able to witness the intentionality of renaissance in person. I actually what was that a month ago? Or I can’t even keep up with everything. Oh

Christina Drake 39:21
my gosh. It feels like it was two years

Earnest Sweat 39:25
ago, but yeah, three weeks, yeah, went to Renaissance on Demo Day, and got to go to Ford Field and meet with a lot of startups, and also ecosystem innovation stakeholders in Michigan, and I love what you all have built. The turnout was amazing. There were investors from all over the country. And I just wanted to say, kind of, how did you all come to this approach? Because when I see so many, I’ll pick on my home state. So many fund to funds in, like Arkansas, the approach is there has to be a mandate of, like, Hey, you have to invest in here. And you guys are taking the kind of the long term approach of influencing the ecosystem, kind of talk to me on why, and kind of the things you’ve learned on taking that approach,

Christina Drake 40:20
sure. Well, first, I cannot take any credit for this. I’ve been with Renaissance for about two years, and so the team has built these things and has built a reputation and an infrastructure that I’m, you know, I’m biased at this point now, but it’s so nice to hear you say that you know, to live up to like, all these great things and to be really influential in the community. On Demo Day started, and for the audience, on Demo Day is essentially at its core. It’s really, really highly customized feed dating between Michigan founders and investors from all around the country, and on Demo Day began about 10 years ago. We were inviting all of our LPs, but also all of the funds in our portfolio to come into Detroit for our annual meeting. And Chris and Jeff and the team had the thought, well, you know, since we have all of these investors here, why don’t we ask them to stick around for another hour or two and introduce them to some startups from the state? And so the first on Demo Day had like eight or 10 startups that we introduced to the VCs who had traveled in and three weeks ago, the event that earnestly you were just talking about, we had over 240 startups apply to participate, and had over 600 attendees on Demo Day. And part of I think, why it has been successful is because Michigan has, like, really fantastic momentum for the entrepreneurial ecosystem, and there are great ideas and great startups that are coming out of the state. The other thing is, I think people, especially with COVID, you know, silver lining, I guess, have started to realize that they can pretty much live anywhere they want and do the job that they want, and Michigan is a fantastic place to live and to build. And then the third piece is that, you know, investors right, have seen that it’s worth coming and spending some time. I don’t think that this is particular to Michigan, but I think it’s more of a Midwest phenomenon. Valuations tend to be a little bit more reasonable. Exit expectations tend to be a little bit more reasonable. I’ve lived in and visited lots of different parts of the country, and so I feel like I can also say people are pretty, you know, pretty easy for most people to work with. And so I think all of those things have combined, and you layer on that just consistent rights of people continuing to show up and continuing to sort of show value to all to all of the groups involved.

Earnest Sweat 43:19
Yeah, it was, it was an amazing event, and I thank you for inviting me. And I think more, you know, approaches should be applied like that in the country. I know there’s one, I forgot the name of it, but in Ohio, there’s one that’s happening in Milwaukee now as well that Grady runs kind of a similar kind of model. So yeah, so I think we should have more of those, and then we’ll start to see these hubs grow more and more, and then also the connectivity. Because I think as automation grows, all these, you know, industry leaders and in different industries all over the country, they’re going to have to embrace technology and also have clear partners and ties and have that trust built.

Christina Drake 44:13
Yeah, that’s right, Ernest, I think i The one other thing I wanted to say, I don’t know that I got to the core of your question before, so I want to just make sure I add what you asked, you know, why not require, right? Yeah, the funds that the funds that we invest in, to do something in Michigan, and I think, I think it first speaks to king of the culture here in Michigan, and in particular in Southeast Michigan, which is where Detroit and Ann ARRA, which is like a little bit of a chip on your shoulder, like really hard working a lot of grit. And I think the short answer to your question is we wanted to prove that we could meet our goals without. Adding those requirements. And I think that we have, I mean, we have attracted $3 billion of venture funding to entrepreneurs based here in the state, without putting any, you know, constraints or obligations on the investors that we work with. And so it was sort, it’s like one of those, like, you know, like, it’s here, and one of those things where it’s, like, we’re pretty confident that if we bring you here, if we get you here right, that you’ll see it. And eventually we’ll, you know, we’ll create the movement. We’ll create the momentum towards a goal,

Alexa Binns 45:41
and you’re sitting on the Investment Committee for the manager who is listening, who’s a good fit for your fund of funds, who should be pitching you? Sure.

Christina Drake 45:51
So we start with fund sizes that are about 75 million. I think our sweet spot, it’s between 75 and probably 350 or so, and we look for specialists. So specialist investors, high ownership, high conviction from a sector perspective, we, as is a renaissance fund. We’re trying to be broadly representative of venture. We’re not taking any sector bets. And so it ends up being about 50% tech, about 30% health care, and then the balance is in more emerging sectors. I would put manufacturing, materials, mobility, emerging for venture right, AG, tech, I would put in there, also from a stage perspective, that is where we have a bias and we shade to the earlier stages. So most of the funds that we invest in are seed. They focus on seed and a and all of this is codified in a six tenant framework that is created to guide our diligence and guide our decision making. There’s over 3000 venture funds in the US, and at Brennan’s hunt, we commit anywhere from 10 to 15 per fund. So we have to be really intentional and really specific about what we’re looking for and about what we think will, you know, set us and set our investors up for success in the long term. So those tenants are strategy, differentiation, performance, of course, like track record and sort of a non-starter, alignment, risk management and culture, which is just a fancy way of saying we have a no jerks policy. And then, you know, sort of at what I referenced before, one of the things that I would put this under, probably strategy and differentiation. One of the things that really stands out to us now, and that we’re always looking for, is a focus on exit funding.

Alexa Binns 47:54
We hear more about risk. It’s one thing that LPS haven’t spoken too much on the show.

Christina Drake 48:00
Yeah, it’s sort of counter intuitive for venture, right? The way that we think about it is, it is, is your house in order? So do you have a recognizable auditor law firm? You know, who’s your, who’s your admin, those sorts of things. So just making sure that all of that is in order insurance policies. So things that often are it on page like 142 of the DEQ Jesus,

Alexa Binns 48:38
our sponsors. Thank you.

Christina Drake 48:42
So you know, it’s like, the way that we think about it is, like, these are, again, not super exciting things, but it’s the type of thing that you know can sort of make it. Can make or break you, and it shouldn’t be right, like, what we want to be able to focus on, and the investment risk that you’re taking, and so we don’t want to have to worry about the other thing.

Earnest Sweat 54:14
you’ve blessed us with so much kind of information today and insights, and thanks for sharing your story. Are there any final thoughts that you have for our audience of LPs and GPS, that, you know, kind of parting thoughts? Detroit

Christina Drake 54:28
is the place to be. There are so many things happening here. From, from a startup perspective, from, you know, just in general, a venture perspective, I really want to make sure I give a handful of people a shout out. So there was a report that was released last year that named Detroit the second fastest growing geography for venture in the whole world, behind Dubai. So like, if you didn’t, you know, if you needed more proof, I mean. There’s that study. The startup scene here in Michigan is just really exciting. There’s a lot of positive energy and momentum across the state, and there are dollars that are flowing from the state and from funds within the state. Just to give you a flavor you have like sharee with the hyper Fiber team, which is an advanced manufacturing startup that creates steel fibers to reinforce concrete structures like bridges. You have a biotech startup called circ Nova, which is led by Crystal Brown. She just closed a $2 million round. You have aI enabled fin tech for millennials called Pocket nest. You tread cycle, which is an end product manufacturing startup that is using water jet technology to break down old tires into reusable rubber material. First Ignite. They’re an AI software for commercialization research. So it’s just, it’s all sectors everywhere, and there’s a lot of great things happening here. A lot of these organizations are also on the Renaissance Michigan startup Hot List, which is on our website. Other great resources, if you want to get a sense for what’s happening in the state, are Michigan Founders Fund and black tech Saturdays, run by Alexa and John mcternage, there’s just so much momentum here, and everyone should come check it out.

Earnest Sweat 56:27
Thank you for that, and I agree everyone should, every investor, GP, every allocator, should check out the demo day to get a glimpse and see it for themselves. And Christina, I just want to thank you for making time for the podcast today.

Christina Drake 56:43
Earnest and Alexa, it’s been such a pleasure. It’s been a lot of fun. Thank you so much for having me.

Alexa Binns 56:47
See you later. Allocator.